MODULE 1

CLIFF LORDZHLE REED

BSESS FSM 3B
SESSION 3: THE ENTREPRENEUR AND HIS JOURNEY

Source: https://www.slideshare.net/pokhrelbidur/opportunity-recognition-for-entrepreneurs

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
What Is This Session About?
Welcome to the third session of Module 1. This session will allow us to put ourselves in
the shoes of the entrepreneur and begin to understand what the entrepreneur begins his
journey, and that is identifying opportunities to exploit and turn into an entrepreneurial
venture.

This will be done by discussing your personal strengths, abilities and talents that you can
build on to identify business opportunities. We will also be using metaphors and brain-writing as
techniques to “think outside the box”.

Towards the end of this session, we will learn how to evaluate the opportunities that we
have identified on the basis of criteria considered to be important by successful entrepreneurs.

What Will You Learn?

At the end of this session, we will have identified abilities useful for opportunity
identification. We will also have learned creativity techniques to come up with original ideas as
well as learned basic criteria to evaluate business opportunities

What Do You Already Know?

Let’s begin this session, by looking at and reflecting on the quote below:

Let’s Reflect:

Why do you think that identifying and evaluating

business opportunities is the basis and starting
point for entrepreneurship?

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Let’s Study:
 Opportunity has been acknowledged as the key component of entrepreneurship. This
partially explains the growing interest in opportunity identification, which resulted into well
thought out definitions, processes and evaluations of opportunities (Alsos & Rasmussen, 2007;
Fiet, 1996; Gartner et al., 2003; Shane & Venkatara- man, 2000).

The growing interest in entrepreneurial opportunity has lead to the emergence of several
definitions of the concept, which are to a high degree similar. Scholars defined it as situations in
which new goods, services, raw materials, markets, and organizing methods can be introduced
through the formation of new means, ends, or means-ends relationships (cf., Alsos &
Rasmussen, 2007; Casson, 1982; Eckhardt & Shane, 2003). Opportunities vary largely in
complexity and
characteristics and so do the processes through which they are identified (Alsos & Ras- mussen,
2007).

Other researchers like Smith, Matthews and Schenkel (2006) were more specific by
identifying two types of opportunities that istacit and codified, they defined a codified
opportunity as a situation that is well-documented, articulated or communicated, in which a
person can create a new means-ends framework for recombining resources. As pointed out by
other researches, this recombination can include new goods, services, raw materials, markets
and organizing methods. For example, a codified opportunity may be illustrated by a franchise in
which the opportunity is clearly documented. By comparison, a tacit opportunity is a situation
that is difficult to codify, articulate or communicate, in which a person can create a new means-
ends framework for recombining resources.

In broad terms, an opportunity may be the chance to meet a market need (or interest or
want) through a creative combination of resourcesto deliver superior value (Casson, 1982;
Kirzner, 1973; Schumpeter, 1934). Hansen (2006) points out that what most literature in
entrepreneurship calls “opportunity recognition” appears to include three distinct processes: (1)
sensing or perceiving market needs and/or underemployed resources, (2) recognizing or
discovering a “fit” between particular market needs and specified resources, and (3) creating a
new “fit” between
 Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
heretofore separate needs and resources in the form of a business concept (De Koning, 1999;
Hills,1995).

The identification of opportunities that initiate entrepreneurial ventures is the key to the
engine that starts new businesses; opportunity recognition is the progenitor of both personal
and societal wealth (Venkataraman, 1997). Venkataraman (1997) and Gaglio and Katz (2001)
argue that understanding the opportunity identification process is one of the primary questions
within the province of entrepreneurship. This awareness of the importance of opportunity to
entrepreneurship has spurred numerous investigations of one's ability to identify opportunities.

It is important to emphasize during the training that opportunity Identification is a

continuous process throughout the entrepreneurial process.

Personal Evaluation

Smith, Matthews and Schenkel (2006) and Shane (2003) realized in their work that if
different types of opportunities are identified, it is necessary to bring the entrepreneur back into
the picture to understand the relationship between the type of opportunity and the
entrepreneurial process. Other researcher like Baum, Locke, and Smith (2001) and Rauch and
Frese (2000) have pointed out that personality remains an important general predictor of
entrepreneurial behavior, once specific mediating factors are considered. This can be achieved
by people evaluating themselves thus knowing what they are good at that is their strength and
for them to think around these strengths (personal abilities) and also what they love doing,
likes,
interests and hobbies.

Let’s Think About This:

This exercise is important because you get a good rate of one’s strength and this helps
you to achieve your goals and also excel in whatever you decide to do. With this, answer the
following questions:
 1.How can you use your personal abilities in entrepreneurship?

Business management skills.

Teamwork and leadership skills.
Communication and listening.
Customer service skills.
Financial skills.
Analytical and problem-solving skills.
Critical thinking skills.
Strategic thinking and planning skills.

2. Can hobbies be turned into a business venture?

Though you may assume it's only suitable as a hobby, there's a chance you can monetize it
and turn your talent into a money-making business venture. That's if you know what you're
doing, of course

3. Do you know anyone who has started a business out of their talents, skills, hobbies or
interests?
Yes and it all just started as a hobby.

Let’s Try This:

Write down your personal strengths, hobbies and interests:

Enduro Mountain biking
Fish keeper enthusiast
Movies
E cigarette/vape collector

What am I good at: What are my hobbies: What are my interests:

Im very good at enduro mountain biking to be specific I rank at 4 th over all here in the whole
bicol region.
 Understanding your hobbies, and interest well will allow you to know the business
ideas that you can pursue. Always focus on your strength because they help you know which
business ideas to pursue to achieve your goals. This is the starting point on how to get a good
business idea. Now, list down all the possible business ideas that come to mind based on your
strengths, hobbies and interests.

1. bike garage

2 enduro bike clinic

3. my own vape shop

4. my own fish shop/ farm

5. open my own vip movie theater room

Personal Goals

Brunstein and Gollwitzer (1996), in their research pointed out the importance of self defining
goals as they do motivate some people. That is why it is important for any entrepreneur to set
goals that may act as motivators in the opportunity identification process and their

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
businesses. It is important to differentiate between wishes and goals. Wishes are imagined
future states. In contrast to wishes, goals are objects or aims of actions (Locke & Latham, 2002).
So, goals indicate the steps to take to make the wishes come true.

A goal is something that we want to achieve. It is also a specific, measurable occurrence,

object, or accomplishment that one would like to achieve, or obtain in the future. One where
you develop concrete action plans to take you to where and what you want in the future. A
goal statement is an investment in yourself; it clearly identifies what you want, how you will get
it, and when you will get it. The goal should be SMART (Specific, Measurable, Achievable,
Realistic, Time bound).
Let’s Think About This:

While looking at your strengths, hobbies and interests as a source of ideas for business
opportunities, it is equally important to check if the opportunities identified are in line your
personal goals. Now that we understand that setting goals is also important, answer these
questions:

1. What kind of goals should we make?

Goals that will have good results
2. Is it important that our business ideas are in line with the goals we want to achieve in
life?
Yes because goals are keys in achieving success in your business
Let’s Try This:
Write down your personal goals and categorized them into short (up to one year),
medium (1-3 years) and long term (3 years plus). The goals should be achievable and realistic in
comparison with the resources you have and type of business. They should be easy to assess
within a given time period.

Short term Goals:

1. be active

2.be positive

3. be brave

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Medium term Goals:

1. be wise

2.be determined

3. be optemistic
Long term Goals

1.be patient

2.dont rush things

3always be positive in your business.

One of the secrets to achieving your goals is knowing how to ask for help from people
who have those skills you don’t possess. In return, you offer them the skills you have, which will
often turn out to be just what they need to achieve their goals. Complementary skills serve
everyone involved. Goals motivate you to turn your vision of the future into reality.

Creativity

Creativity is a key to the development of both new and existing businesses, especially for
those who want to grow to- wards a profitable business. Creativity is typically used to refer to
the act of producing new ideas, approaches or actions, while innovation is the process of both
generating and applying such creative ideas in some specific context. Definitions of creativity are

typically descriptive of activity that results in:

• producing or bringing about something partly or wholly new;

• investing an existing object with new properties or characteristics; imagining
new possibilities that were not conceived of before and;

• seeing or performing something in a manner different from what was thought

possible or normal previously.

Including creativity skills in venture development team allowing for creativity to emerge
in both the early and later stages of the development process would likely contribute to more

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
effective opportunity recognition and successful launches of new ventures.
Let’s Think About This:
We now understand that creativity plays an extremely important part in entrepreneurship. In
fact, it comes hand in hand with innovation. With this, answer the following questions: 1. Do
you think that it is important for entrepreneurs to be creative?
2. Can an entrepreneur succeed even without creativity?
3. Is creativity needed only in the beginning of a business venture or should it be
maintained all throughout the entrepreneurial journey.

Let’s Try This:

Let’s play a game! The rule is to connect the three dots with three straight lines in as many
ways as you can.

● ●

●● ●●

● ●

●● ●●

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Did you do this? What about this? ●
●● ●

●●

The thing is, there are numerous ways to connect the dots, but the way the dots were
arranged compelled us to connect them in a certain way. However, if you look at it from
another angle, you figure it can be connected in many other different ways. Remember the
movie Big Hero Six - when Hero was stuck in trying to look for an idea for the competition he
was joining? He only got out of his mental block when his big brother carried him upside down
and he saw his robot from a different angle. Creativity allows us to look at things from a
different perspective. In the same way using creativity in identifying opportunities compels us
to look at things from a different angle. Keep this in mind! Always look at things from several
angles and you never know that a negative situation may turn out to be an opportunity.

Brainwriting

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Another technique that entrepreneurs use is brainwriting. It is a method where a
person writes whatever comes to mind. At times, metaphors can also be in the process. When
doing brainwriting the rules are ideas should not be evaluated. You should not be too critical,
all ideas are allowed, even absurd or foolish ones. Come up with ideas that are as funny or as
silly as
possible as all ideas will not be evaluated. Do not judge any idea and you should not be too
detailed or complicated. Brainwriting literally involves writing what comes to mind.

Let’s Try This:

 Let’s practice a bit of brainwriting, shall we? Write the first thing that comes to mind
after each question. In this exercise, use as many metaphors as you can because that is what
makes you most creative.

1. If you were a foreigner in your country, what would you need?

map

2. If you were a baby, what would you need?

milk
3. If you were an old man, what would you need?
glasses
4. If you were a street kid, what would you need?

clothes

5. If you were a fish, what would you need?

gills
6. If you were living on the moon, what would you need?
Space suit

Problem Solving

The role of prior knowledge has been identified as an important individual difference in
the identification of entrepreneurial opportunities. Prior knowledge creates a knowledge
corridor that allows people to recognize certain opportunities (Venkataraman, 1997; Hayek,
1945).

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Through qualitative research, Shane (2000) provided evidence that people’s prior
knowledge of markets, how to serve markets and customer problems were related to their prior
knowledge. It was argued, however, that in the case when the opportunity is tacit, and no prior
knowledge existed, the opportunity would tend to be overlooked as suggested by Austrian
economists (Kirzner, 1997). Without the prior knowledge and associated knowledge corridor, the

potential entrepreneur would not recognize the opportunity. In the case when prior knowledge
existed and the opportunity was codified, the search could be more focused on opportunities
within the field of experience.

Needs
People will always have needs; a human need is a basic requirement that a person
wishes to satisfy. Needs are basic parts of human life, and are therefore not created by
businesses. Businesses only try to influence demand by designing products and services that are
attractive, affordable, available and work well for the customer.

Identifying people’s needs is one of the better strategies that entrepreneurs use when
looking out for opportunities. To do this, look out for peoples’ needs like; what exists is too ex
pensive need something cheaper, what existsis not easy to use so need a user friendly one,
quality of existing product or service is not good enough and many others. Opportunities can be
identified through other ways like;

• Existing product/service provider weaknesses

• Application of existing products or new functions
• Cross-border limitations

Let’s Think About This:

Identifying problems and figuring out how to turn that into opportunities is a good
entrepreneurial practice. In the same manner, so is identifying what people need, even if they
haven’t figured it out themselves. With this, answer the following questions:

1. How can identifying problems lead to entrepreneurship?

Entrepreneur always aim for success. Therefore they are great in finding solutions to
problems.
2. Can problems be turned into a business venture?
Yes especially if the problem ha very good solution that might be a key for
A good business.

3. Do you know anyone who has started a business out of a problem they identified?
 Yes and they succeeded

Let’s Try This:

Case Study:
Mrs. Grace Casitas of Malinao Albay has been in business for over 20 years. She
sews uniform jackets from organic wool thread for over 10 primary and secondary
schools in Albay. During the production process of these jacketsthere are off-cuts(waste
material). These off cuts have accumulated over the years. Presently, she has no more
space for these off cuts.
What would you advise Mrs. Casitas to do with these sweaters’ off cuts? Come up
with ideas that are viable and feasible in the community that you live in.
1. find a way to make use of the cut offs
2. recycle
3. donate to factories who look for cut offs
4.make use off cut offs
5. have storage for waste cut offs

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management